NEW YORK - A Second Circuit U.S. Court of Appeals panel's ruling that a policyholder's "passive retention" of his annuity funds fails to meet the "in connection with" requirement for Securities Litigation Uniform Standards Act of 1998 (SLUSA) preclusion because an insurance company issued the misrepresentation to state regulators and not the policyholder directly conflicts with U.S. Supreme Court precedent on the application of SLUSA's "in connection with requirement," the defendant argues in an April 24 petition for rehearing (Richard O'Donnell v. AXA Equitable Life Insurance Co., No. 17-1085, 2nd Cir.).
ATLANTA - The Georgia Republican Party (GRP) lacks standing to challenge the Securities and Exchange Commission's enactment of a rule limiting the ability Financial Industry Regulatory Authority (FINRA) members to make political contributions to government officials they solicitate for investment advisory services contracts because the GRP is not a placement agent that would be effected by the rule, an 11th Circuit U.S. Court of Appeals panel ruled April 26 in dismissing the GRP from the action and transferring it to the District of Columbia Circuit U.S. Court of Appeals (Georgia Republican Party v. SEC, No. 16-16623, 11th Cir., 2018 U.S. App. LEXIS 10645).
WASHINGTON, D.C. - The U.S. Department of Labor (DOL) on April 23 issued Field Assistance Bulletin No. 2018-01 to provide guidance to the Employee Benefits Security Administration's national and regional offices for addressing questions from plan fiduciaries and other interested stakeholders about Interpretive Bulletin (IB) 2016-011, which relates to the exercise of shareholder rights and written statements of investment policy, and IB 2015-012, which addresses "economically targeted investments" (ETIs).
DALLAS - A federal judge in Texas on April 25 granted final approval of a $100 million settlement in a long-running securities class action lawsuit between investors and Halliburton Co. and its CEO, who were alleged to have issued certain misrepresentations regarding the company's asbestos litigation liability, its financial condition and the benefits of a merger deal in violation of federal securities laws (The Erica P. John Fund Inc. v. Halliburton Co., et al., No. 02-1152, N.D. Texas, 2018 U.S. Dist. LEXIS 69143).
NEW YORK - Alleged misrepresentations made by online marketplace Etsy Inc., certain of its officers and directors and underwriters of its initial public offering (IPO) concealing deficiencies in the company's policies regarding the sale of counterfeit products were not actionable and, as a result, a federal district court did not err in dismissing a shareholder class action, a Second Circuit U.S. Court of Appeals panel ruled in an April 24 summary order (Saleh Altayyar, et al. v. Etsy Inc., et al., No. 17-1180, 2nd Cir.).
WASHINGTON, D.C. - In an April 24 order, the Securities and Exchange Commission announced a $35 million penalty agreement with the successor of Yahoo! Inc., by which it settled charges that the internet firm misled investors by failing to report a massive 2014 data breach for two years (In re Altaba Inc., No. N/A, SEC).
NEW YORK - A Second Circuit U.S. Court of Appeals panel on April 20 ruled that a defendant in a securities fraud lawsuit filed by the Securities and Exchange Commission was collaterally estopped from denying his liability in the instant action based on his guilty plea in a related criminal proceeding, affirming a federal district court's grant of summary judgment in favor of the SEC (United States Securities and Exchange Commission v. Francisco Illarremendi, et al., Nos. 17-1506, 17-1893 and 17-2551, 2nd Cir., 2018 U.S. App. LEXIS 9948).
WASHINGTON, D.C. - During oral arguments on April 23, the U.S. Supreme Court appeared to be divided as to whether administrative law judges (ALJs) of the Securities and Exchange Commission are inferior officers and are, thus, subject to the appointments clause of the U.S. Constitution (Raymond J. Lucia, et al. v. Securities and Exchange Commission, No. 17-130, U.S. Sup.).
NEWARK, N.J. - A former UBS Financial Services Inc. employee cannot claim that he was retaliated against in violation of the anti-retaliation provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act because the former employee failed to show that he reported UBS's alleged securities law violation to the Securities and Exchange Commission before his termination from the company, a federal judge ruled April 19 in granting UBS's motion to dismiss (Craig D. Price v. UBS Financial Services Inc., No. 17-1882, D. N.J., 2018 U.S. Dist. LEXIS 66200).
PASADENA, Calif. - A Ninth Circuit U.S. Court of Appeals panel on April 20 ruled that pursuant to U.S. Supreme Court precedent, a federal district court improperly determined that a shareholder must plead scienter in making a claim under Section 14(e) of the Securities Exchange Act of 1934 instead of negligence, which is a departure from the holding of five other federal circuit courts that have ruled on the issue (Gary Varjabedian v. Emulex Corp., et al., No. 16-55088, 9th Cir., 2018 U.S. App. LEXIS 10000).
WASHINGTON, D.C. - The whistleblower anti-retaliation provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 does not extend to individuals who report a securities law violation but do not report it to the Securities and Exchange Commission, the U.S. Supreme Court ruled Feb. 21 in narrowing the statute's definition of a whistleblower (Digital Realty Trust Inc. v. Paul Somers, No. 16-1276, U.S. Sup.).
WASHINGTON, D.C. - The U.S. Supreme Court on Feb. 20 granted a motion for leave to dispense with preparation of joint index filed by petitioners in an appeal of a District of Columbia Circuit U.S. Court of Appeals ruling that Securities and Exchange Commission administrative law judges (ALJs) are constitutional officers pursuant to the appointments clause of the U.S. Constitution (Raymond J. Lucia, et al. v. Securities and Exchange Commission, No. 17-130, U.S. Sup.).
BOSTON - A group of investors may aggregate their losses and has met all statutory requirements to serve as lead plaintiff in a securities class action lawsuit against a biopharmaceutical company and two of its senior officers over misrepresentations that they made regarding the company's prospects for its herpes treatment, a federal judge in Massachusetts ruled Feb. 12 in granting the investor group's motion for appointment as lead plaintiff (Steven Emerson, et al. v. Genocea Biosciences Inc., et al., No. 17-12137, D. Mass., 2018 U.S. Dist. LEXIS 22228).
SAN FRANCISCO - Although a shareholder's motion to alter judgment in a securities class action lawsuit is procedurally proper and timely, newly discovered evidence is still insufficient to cure the shareholder's scienter and loss causation pleading deficiencies, a federal judge in California ruled Feb. 9 in denying the motion (Likar Rok v. Identiv Inc., et al., No. 15-5775, N.D. Calif., 2018 U.S. Dist. LEXIS 21916).
CHARLOTTE, N.C. - A technology-based provider of advanced fossil and renewable power generation equipment and two of its senior officials have failed to show that its alleged misstatements and omissions in a securities class action lawsuit are forward-looking, puffery or optimistic statements or that the statements were not made with the requisite scienter, a federal judge in North Carolina ruled Feb. 8 in denying the defendants' motion to dismiss (Eric Ollila v. Babcock & Wilson Enterprises Inc., et al., No. 17-109, W.D. N.C., 2018 U.S. Dist. LEXIS 20587).
NEW HAVEN, Conn. - A shareholder filed a securities class action complaint against insurance provider Aetna Inc. and its board of directors on Feb. 5 in Connecticut federal court, seeking to halt the company's proposed merger deal with CVS Health Corp. until shareholders are provided with information necessary to make a well-informed decision in connection with the proposed transaction (Joel Rosenfeld v. Aetna Inc., et al., No. 18-0213, D. Conn.).
SALT LAKE CITY - A federal judge in Utah on Feb. 5 ordered parties to submit a joint statement of facts and questions for certification to the Utah Supreme Court to clarify what the applicable standard is for determining control-person liability under the Utah Uniform Securities Act (Gil A. Miller v. Union Central Life Insurance Co., No. No. 14-575, D. Utah, 2018 U.S. Dist. LEXIS 19388).
SAN FRANCISCO - A shareholder was appointed lead plaintiff in a securities class action lawsuit against high-performance electric vehicles manufacturer Tesla Inc. and certain of its current and former executive officers, and his choice of counsel was appointed as lead counsel on Feb. 2 after a federal judge in California ruled that both the shareholder and lead counsel met all requirements to serve in their roles (Gregory Wachos v. Tesla Inc., et al., No. 17-5828, N.D. Calif.).
SAN FRANCISCO - A federal district court's application of a general proximate cause test was the proper test for determining loss causation in a securities class action lawsuit brought by shareholders against a solar energy company and certain of its current and former executive officers, a Ninth Circuit U.S. Court of Appeals panel ruled Jan. 31 in affirming the lower court's ruling and clarifying the lower court's question on appeal (Mineworkers' Pension Scheme v. First Solar Inc., No. 15-17282, 9th Cir., 2018 U.S. App. LEXIS 2450).
BOSTON - A biopharmaceutical company and certain of its executive officers will pay more than $17.5 million to settle claims that they misrepresented poor clinical trial results for the company's cancer therapy drug tivozanib in violation of federal securities, shareholders claim in a Feb. 2 motion for preliminary approval of settlement filed in Massachusetts federal court (In re AVEO Pharmaceuticals Inc. Securities Litigation, No. 13-11157, D. Mass.).
BROOKLYN, N.Y. - The sentencing date for former pharmaceutical company CEO and hedge fund manager Martin Shkreli following his conviction on charges relating to his operation of a Ponzi scheme has been pushed back to March after a federal judge in New York on Jan. 31 issued a minute order setting a briefing schedule to allow government prosecutors and Shkreli's counsel to debate loss amount and forfeiture in the action (United States of America v. Martin Shkreli, No. 15-637, E.D. N.Y.).
BOSTON - A provider of outpatient dialysis services will pay $4 million to settle claims that it concealed its involvement in an insurance fraud scheme in violation of federal securities laws, according to a motion for preliminary approval of settlement filed by lead plaintiffs on Jan. 31 in a Massachusetts federal court (Mary Esposito v American Renal Associates Holdings Inc., et al., No. 16-11797, D. Mass.).
MINNEAPOLIS - Shareholders have properly shown that an investor class in a securities class action lawsuit against a medical technology provider and several of its current and former executive officers meets all statutory requirements for certification, a federal judge in Minnesota ruled Jan. 30 in granting class certification, albeit with a shorter class period than proposed (West Virginia Pipe Trades Health & Welfare Fund v. Medtronic Inc., et al., No. 13-1686, D. Minn.; 2018 U.S. Dist. LEXIS 14744).
BOSTON - Federal merger and acquisition (M&A) transaction securities class action lawsuit filings more than doubled in 2017 helping the total number of filings for the year to reach record numbers for the second straight year - the most since the Private Securities Litigation Reform Act of 1995 (PSLRA), 15 U.S.C. 78u-4, was enacted, according to an annual report released by economic and financial consulting firm Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse on Jan. 30.
NEW YORK - The U.S. subsidiary of BNP Paribas S.A. will pay $90 million after pleading guilty in New York federal court to its role in a massive price-fixing conspiracy in the foreign exchange (FX) market, according to a U.S. Department of Justice press release issued Jan. 26 (United States of America v. BNP Paribas USA Inc., No. 10-cr-061, S.D. N.Y.).